North Korea Says It’s in ‘State of War’ With South Korea

North Korean leader Kim Jong Un rides on a boat, heading for the Wolnae Islet Defense Detachment, North Korea, near the western sea border with South Korea, in this March 11, 2013 photo released by the Korean Central News Agency (KCNA) and distributed March 12, 2013 by the Korea News Service. Source: KCNA via KNS/AP Photo

March 30 (Bloomberg) -- North Korea said it’s in a “state
of war” with South Korea, escalating threats against the
neighboring nation a day after putting its forces on standby to
strike South Korean and U.S. targets.

“Every issue raised between the North and South will be
dealt with in a wartime manner,” the state-run Korean Central
News Agency said today, citing what it called a special
statement. U.S. stealth bomber flights over South Korea this
week are “unacceptable” and North Korea’s statement is a
“final warning” to the U.S. and its allies, KCNA said.

Tensions have risen to the highest level in at least three
years since North Korea detonated a nuclear device in February,
defying global sanctions. Kim Jong Un’s regime this month cut
off a military hot line with the South, put artillery forces on
high alert and threatened pre-emptive nuclear strikes, drawing
condemnation from U.S. Secretary of Defense Chuck Hagel.

“It’s part of what I call March Madness on the Korean
Peninsula,” said Kenneth Quinones, professor of Korean studies
at Akita International University in Japan. “Every March when
the U.S. and South Korea hold military maneuvers, North Korea
goes on full alert and makes similar threats. The only
difference is the rhetoric has intensified, and the situation
certainly merits concern and close monitoring.”

Industrial Zone

North Korea said it will shut a jointly run industrial zone
in its border city of Gaeseong if the South and the U.S.
continue to “insult the dignity” of the country, an
unidentified spokesman for the General Bureau for Central
Guidance to the Development of the Special Zone said today in a
statement carried by KCNA. North Korea may “ban the south
side’s personnel’s entry into the zone and close it,” the
spokesman said.

No unusual North Korean troop movements have been detected
since the North’s threat to close Gaeseong, and South Korean
businesspeople spending the night there are safe, Unification
Ministry spokesman Kim Hyung Suk said by phone from Seoul.

“We regret these continued threats and urge the North to
retract them,” said the spokesman. Emergency communication
channels with South Koreans in Gaeseong are operating to ensure
their security, he said.

Gaeseong is the last remaining example of inter-Korean
cooperation. More than 120 South Korean companies employ about
53,000 North Koreans at the complex. From its opening in 2005
through Jan. 31, goods totaling more than $2 billion have been
produced there, according to Unification Ministry data.

Previous Disruption

About 900 South Koreans regularly visit Gaeseong, located
about 10 miles (16 kilometers) north of the demilitarized zone,
the world’s most heavily fortified border.

Almost 800 South Koreans were stranded in Gaeseong in March
2009 after the North temporarily severed communications. The
North also briefly cut ties in 2010 after an international panel
found it responsible for the sinking of a South Korean warship
that left 46 sailors dead.

Four North Korean websites were inaccessible today due to
what appeared to be a “loosely coordinated effort by hackers,”
according to a website that monitors Internet activity on the
Korean peninsula. The North’s main Naenara web portal and the
homepages of KCNA, the state-run airline Air Koryo, and the
Voice of Korea, a broadcast outlet, were malfunctioning, North
Korea Tech said on its website.

South Korea’s Unification Ministry spokesman said some
North Korean sites seemed to be periodically working.

Stealth Bombers

South Korea’s armed forces “will continue to closely
monitor the North’s military movements” and “comprehensively
punish any instances of provocation by the North,” Kim Min
Seok, a Defense Ministry spokesman, said by phone.

North Korea yesterday put some units on standby after Hagel
on March 28 denounced the totalitarian state’s “provocative
actions and belligerent tone.” Kim met with military leaders
yesterday and ordered the preparations after two U.S. B-2
stealth bombers flew over South Korea on March 28 in a show of
deterrence.

That followed earlier overflights by B-52 bombers as the
U.S. and South Korea held a two-month exercise named Foal Eagle,
an annual event scheduled to include about 10,000 soldiers.

“The situation of the Korean peninsula being neither at
peace nor at war has come to an end,” KCNA said today. The
states remain technically at war because their 1950-1953
conflict ended without a peace treaty.

Japanese Comments

“It is extremely regrettable that North Korea continues to
make provocative statements, including this one, and to carry
out provocative actions,” Japanese Foreign Ministry Deputy
Press Secretary Naoko Saiki said by phone. Japan will keep
working with other countries, “seeking to have North Korea
carry out its obligations.”

Two calls to China’s Foreign Ministry seeking comment on
the North Korean statement went unanswered outside business
hours. Kim’s country relies on its neighbor for diplomatic and
economic support.

“Barring any incident, I expect a gradual softening,”
said Quinones, who worked for the U.S. State Department before
joining the university in Akita. “I don’t think war is
inevitable. I’m optimistic cooler heads in Washington and Seoul
will prevail.”

North Korea’s rhetoric has had little impact so far on
South Korean stocks, as the benchmark Kospi index gained 2.9
percent this week, its best performance in six months.

“Technically the two countries have been at war, just
stopped fighting,” Sebastien Galy, a foreign-exchange
strategist in New York at Societe Generale SA, wrote in a note
to clients received today. “But in the game of rhetoric it
feels a bit like closing the door behind you.”